Israel's Prime Minister Ariel Sharon said on Saturday that the fact European leaders were still in contact with Palestinian leader Yasser Arafat was undermining Palestinian Prime Minister Mahmoud Abbas.

In an interveiw to the London-based Daily Telegraph, Sharon said that, "...he [Arafat] got all those telephone calls from leaders, mostly from Europe, and he receives messages, ministers of foreign affairs and others. Every act of this nature only postpones the progress in the process. Most European countries are doing that. By that they are undermining Abu Mazen."

Sharon also said that Arafat was strong enough to obstruct the peace process, and was indeed doing so, adding that the PA leader, "...controls the larger part of their armed forces, [and] still part of the money..."

The Israeli prime minister also said that Hamas was in need of the cease-fire declared by all the Palestinian factions a few weeks ago because the suffered high casualties and needed to hide themselves, and called upon the Palestinian Authority to act against the "terrorist" organizations.

Meanwhile, th eIsraeli army has demolished a Palestinian house in Rafah, in its first such action in the Gaza Strip since Palestinian groups announced the three-month ceasefire, a Palestinian security source said.

The army demolished the three storey house near the border with Egypt Friday using bulldozers and without giving prior warning to residents, the source said, according to AFP.

Israeli forces also opened fire on Palestinian dwellings at the Khan Youns refugee camp, and at a Palestinian security post, without causing any injuries, added the source. (Albawaba.com)